Sunday, October 10, 2010

2010 Wheat Price Trends: Frbiz Forecasts

Since September, with the influences of domestic demand, the wheat market basically remained steady.

Frbiz analyzes that with the autumn grains listed in the market, in October, although the wheat market will not appear to have big fluctuations, the prices are expected to remain upwardly strong.

First, when autumn grains are listed on the market, the wheat circulation will reduce.

On one hand, as most of the major farmers dedicate the main manpower and material resources to new corn harvest, detracting from winter wheat seed, which will make some areas' wheat sales stagnant, reducing list market volume.

On the other hand, trading business will gradually turn to autumn grains, wheat purchase and sale will be relatively postponed, which will lead to local area supply imbalances, spurring a slight rise.

Second, the flour is in peak season, creating purchase increases.

In recent times, flour market purchasing demand has increased; some enterprises report flour sales in September increased 30%-40% over August.

Frbiz's data shows that domestic small packing flour retail prices increased 0.2%. Among them, Jinan, Chongqing and Guangzhou prices respectively rose 1.3%, 1.2% and 0.9%, and currently the small packing flour price is the highest since 2009.

Third, national policy on rural issues supports market increases.

In recent years, the national government has paid attention to rural issues, implementing policies on the minimum purchase prices , which continue to improve the lowest purchase price level, and implementing storage measures for wheat, rice, corn, and soybeans that strengthen food market regulation and let food prices maintain a steady rising trend.

In addition, in the second half-year, all market prices for meat, eggs, garlic, green beans, vegetables and minor cereals rose, and currently Chinese market grain prices totally increased, which will spur wheat prices to increase as well.